Fox Sports hopes investment will bring success

Fox Sports chief executive Patrick Delany says an important part of its strategy is the relaunch of its AFL-dedicated Fox Footy Channel in 2012, for which Fox Sports spent $10 million to build three new TV studios in Melbourne.
Photo: Nic Walker

by
Ben Holgate

Fox Sports hopes a $20 million investment in new purpose-built TV studios in Sydney’s Artarmon will help to revitalise the pay TV broadcaster and be one of several big investments following an earnings slide last year.

The subscription TV industry has been under pressure as a result of a prolonged consumer malaise, with subscriber growth sluggish and Foxtel aiming to capture new customers with lower-priced packages.

Fox Sports, which is now wholly owned by News Corp following its $2 billion takeover of
Consolidated Media Holdings
late last year, suffered a 5 per cent drop in earnings year-on-year in the six months to June 2012.

“All retail businesses are doing it tough," said Fox Sports’ chief executive Patrick Delany, who noted part of the reason for the earnings drop was due to his strategy of reinvesting in the business.

An important component of this was the relaunch of its AFL-dedicated Fox Footy Channel in 2012, for which Fox Sports spent $10 million to build three new TV studios in Melbourne.

Mr Delany, who has been in the job for more than a year, dismissed industry speculation that Fox Footy had not stimulated an increase in subscribers, saying the channel’s business case was for five years.

“It did pretty well last year," he said. “I think this year’s going to be a strong year for take-up because we have a reputation now that we set the pace in AFL."

The new Sydney studios, however, will be used more for NRL shows than AFL. Mr Delany views Fox Footy as the broadcaster’s feed for southern states and Fox Sports One for NSW and Queensland.

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Fox Sports, which employs 400 full-time staff plus another 150 part-time, began moving into the new Sydney studios several weeks ago. Although the Fox Sports News channel’s studio is the only one operating, there will soon be another two main studios plus two smaller green-screen studios.

The broadcaster has a 10-year lease on the building, with two successive five-year options.

Mr Delany said Fox Sports had no choice but to move. It had outgrown its original, cramped facilities in Pyrmont, where it had been for 18 years, and much of the equipment had become outdated.

He believes the move will also reinvigorate staff, with the fit-out designed to look like the inside of a sports stadium, including giant-sized lettering on the concrete walls and an expansive stairwell linking four floors.

Mr Delany is about to launch an entire rebranding of Fox Sports, including a new logo, at the start of the NRL season in March. To assist in the process he hired brand agency Principals, which he employed for another rebranding project when running pay TV production company XYZ Entertainment 12 years ago.

“The motivation at Fox Sports is to share your love of sport," he said. “The strategy is to create different products in and around each of the sports."

One outcome is to increase the number of magazine programs above 14 per week.

Last year, Mr Delany was forced to go “right to the edge" to pay $120 million in cash over four years to retain the soccer broadcast rights, plus another $500 million in cash over five years for NRL.